ICYMI - PBOC says lending rates will fall further

Author: Eamonn Sheridan | Category: Central Banks

The  People's Bank of China concluded a quarterly meeting Monday evening (Asia time).

The statement from the Bank that followed contained the usual soothing words along the lines of:
  • China will make its monetary policy flexible, targeted and appropriate
  • will keep interbank liquidity reasonable
  • internal and external environment facing the Chinese economy still has risks
  • China will seek greater international economic policy coordination
  • will combat external shocks to support growth
  • China will increase flexibility of the yuan exchange rate, it will be kept stable within a reasonable and balanced range
Of more interest was the bank noted that recent reforms in deposits and lending will help drive a further decline in real lending rates. 

Offshore yuan has weakened from its highs the past few weeks, the PBOC slowed then has halted (at least for now) its rally - taking advantage of the heightened speculation of Fed tapering to come. 
usd/cnh chart 29 June 2021

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